Correlation Between Timothy Plan and Tidal Trust

Can any of the company-specific risk be diversified away by investing in both Timothy Plan and Tidal Trust at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Timothy Plan and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Timothy Plan Market and Tidal Trust II, you can compare the effects of market volatilities on Timothy Plan and Tidal Trust and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Timothy Plan with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timothy Plan and Tidal Trust.

Diversification Opportunities for Timothy Plan and Tidal Trust

-0.18

Correlation Coefficient

Timothy Plan  Tidal Trust

Good diversification

The 3 months correlation between Timothy and Tidal is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Plan Market and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II and Timothy Plan is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Timothy Plan Market are associated (or correlated) with Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust II has no effect on the direction of Timothy Plan i.e., Timothy Plan and Tidal Trust go up and down completely randomly.

Pair Corralation between Timothy Plan and Tidal Trust

Given the investment horizon of 90 days Timothy Plan Market is expected to generate 0.75 times more return on investment than Tidal Trust. However, Timothy Plan Market is 1.34 times less risky than Tidal Trust. It trades about -0.06 of its potential returns per unit of risk. Tidal Trust II is currently generating about -0.25 per unit of risk. If you would invest  2,368  in Timothy Plan Market on October 12, 2024 and sell it today you would lose (9.00) from holding Timothy Plan Market or give up 0.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Timothy Plan Market  vs.  Tidal Trust II

Timothy Plan Market

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Plan Market are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Timothy Plan is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Tidal Trust II

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tidal Trust II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tidal Trust is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Timothy Plan and Tidal Trust

The main advantage of trading using opposite Timothy Plan and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timothy Plan position performs unexpectedly, Tidal Trust can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tidal Trust will offset losses from the drop in Tidal Trust's long position.

The idea behind Timothy Plan Market and Tidal Trust II pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.